LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 17, 2001
TO: Honorable Kim Brimer, Chair, House Committee on Business
& Industry
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2613 by Hochberg (Relating to the payment and funding
of workers' compensation benefits for certain claimants
who work part-time or have multiple employment.),
Committee Report 1st House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2613, Committee Report 1st House, Substituted: positive impact *
* of $0 through the biennium ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $0 *
* 2003 0 *
* 2004 0 *
* 2005 0 *
* 2006 0 *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Probable Revenue Gain/(Loss) *
* Year Subsequent Injury Trust Fund from Subsequent Injury Trust *
* 0918 Fund *
* 0918 *
* 2002 $(11,400,000) $8,000,000 *
* 2003 (11,700,000) 8,000,000 *
* 2004 (12,100,000) 8,000,000 *
* 2005 (12,600,000) 8,000,000 *
* 2006 (13,000,000) 8,000,000 *
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Fiscal Analysis
The bill would amend the Labor Code to clarify the calculation of Average
Weekly Wage (AWW) for injured employees who are employed part-time or by
multiple employers. In the case of injured workers with multiple
employers, the AWW would be calculated based on the total earned wages
from both subscribing and non-subscribing employers rather than only the
earned wages from the employer where the injury occurred. The insurance
carrier covering the employer where the injury occurred would be
responsible for all income benefits awarded by TWCC.
The bill would also allow insurance carriers to apply for and receive
reimbursement annually from the Subsequent Injury Trust Fund (SIF) for
the amount of income benefits paid to injured workers that were based on
other employment.
The bill would authorize TWCC to assess a maintenance tax to insurance
carriers, other than governmental entities, in an amount to generate 120
percent of any projected unfunded liabilities of SIF. The bill would
allow for only partial payment to insurance carriers should the statutory
cap on the maintenance tax be reached prior to all liabilities of SIF
being met. SIF's current funding comes from deposits of insurance
carriers for death benefits awarded when no legal beneficiary exists.
Under the bill, this funding stream would not change.
The bill would require a TWCC actuary or financial advisor to submit a
report biannually to the Research and Oversight Council on Workers'
Compensation (ROC) on the financial condition and project assets and
liabilities of the SIF.
The bill authorize TWCC to purchase annuities for the payment of lifetime
income benefits from SIF should the agency determine that to be
financially prudent in the management of SIF.
The bill would take effect on September 1, 2001 and apply only to
injuries occurring on or after that date.
Methodology
The Research and Oversight Council on Workers' Compensation (ROC)
estimates a $60.8 million cost over five years to the Subsequent Injury
Fund (SIF) in benefits reimbursed to insurance carriers.
The costs are based on a total of 4,387 claims eligible for such
reimbursement each year, an average of 11.3 weeks of temporary income
benefits (TIBs), $540 per week cap on TIBs benefits, and an average
weekly wage (AWW) of $473 projected for fiscal year 2002. The TIBs
benefit cap is assumed to increase by two percent each year and the AWW
is assumed to increase by four percent each year.
Four groups of claimants would be effected by the bill: 1. two full-time
jobs (175 annual claims); 2. two part-time jobs (1,184 annual claims); 3.
a full-time and a part-time job with the injury occurring on the
part-time job (1,029 annual claims); and 4. a full-time and a part-time
job with the injury occurring on the full-time job (1,998 annual claims).
Depending upon the appropriation level of the Texas Workers' Compensation
Commission (TWCC) and current gross premiums remaining constant, the
maintenance tax at its statutory cap of two percent of gross premiums
would generate from $5-8 million in revenue each year for the SIF. As of
April 1, 2001, the SIF has a balance of $24 million. The average income
from death benefits from 1998-2000 has been $3.5 million per year, with
the average benefits being paid out of $2.6 million. With the increased
revenue of $8 million from the increased maintenance tax and the current
SIF revenue and balance, the full projected liabilities could be paid
beyond fiscal year 2006 without insufficient funds.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 453 Texas Workers' Compensation Commission, 478
Research and Oversight Council on Workers'
Compensation
LBB Staff: JK, JO, RT, KM